Welltower Stock Earnings Reports

Welltower reported a record Q3 with strong occupancy, margin expansion and same‑store NOI growth (total portfolio same‑store NOI +14.5% YoY). Q3 net income per diluted share was $0.41 and normalized FFO was $1.34 (+20.7% YoY). The company raised capital (Q3 gross proceeds $2.9B, $1.0B senior notes in August) and exited Q3 with ~$7.0B cash/restricted cash and record low net debt/adjusted EBITDA of 2.36x. Management announced transformative capital allocation activity that brings year‑to‑date transaction activity to roughly $33B (including ~$14B of new acquisitions and ~$9B dispositions/loan payoffs, with ~$23B of incremental transactions announced recently). Key transactions include the GBP 5.2B Barchester acquisition, the GBP 1.2B HC‑One transaction, and an under‑contract sale of an 18M sq ft outpatient medical portfolio for $7.2B (structured to retain $1.2B preferred equity with upside participation). Management expects the aggregate dispositions/acquisitions to be accretive to FFO per share in 2026 and to materially increase the firm’s long‑term growth profile despite near‑term dilution from lease‑ups. Updated full‑year 2025 guidance: net income per share $0.82–$0.88 and normalized FFO $5.24–$5.30 (midpoint $5.27); guidance reflects a roughly +$0.17 midpoint upgrade to normalized FFO driven by higher SHO NOI and accretive capital allocation. Operational highlights: senior housing operating same‑store NOI growth remains very strong (SHO same‑store NOI >20% YoY for the 12th consecutive quarter), occupancy recovery and RevPOR growth continue to outpace expense growth. Strategic/organizational changes: launch of “Welltower 3.0” — an operations and technology–first strategy, exit of Outpatient Medical property management business, senior leadership and tech hires (e.g., CTO Jeff Stott, Chief Innovation Officer Logan Grizzel, CIO Tucker Joseph), and a broad incentive alignment program (management to receive performance‑oriented Welltower stock; RIDEA 6.0 and operator alignment; a $10M annual Welltower stock grant for the top 10 site teams). Accounting and one‑time items: a ~$1.1B upfront noncash charge related to the new 2035 10‑year executive continuity alignment program (adjusted out of normalized FFO) and additional amortization expense over the coming decade. Near‑term risks and considerations called out by management: lease‑up drag from >170 communities under development, execution risk on large transactions and integration, potential near‑term FFO dilution from some payoffs/acquisitions, and the structural tradeoffs of giving up certain assets to re‑focus on senior housing.